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Labour Market Briefing – London Economic Region in October 2016

By Emilian Siman

A decline in the overall regional labour market results

Although the labour market in the London Economic Region seems to be hardly changing lately, during the last three months (August-October) of 2016 the regional conditions deteriorated somewhat, see Figure 1 and Figure 2. The only labour market indicator that improved during this time is the unemployment rate, which dropped relative to September by 0.6 % and thus reached a 5.8 % level. This positive result is shadowed by the progress of other labour market indicators: e.g. labour force dropped by 1.48% (5,300 people) as employment reduced by 0.78% (2,600 positions) and surprisingly unemployment also declined by 11.74 % (2,700 people), see Table 1.

Source: Statistics Canada, CANSIM, Table 282-0122

Figure 1

Looking deeper into the employment change (Figure 2) one will see a compensating playout between full-time employment and part-time employment. Moreover, one can observe some seasonal trends across the years.

However, during October of 2016, the full-time employment declined by 2.43 % (6,600 positions) relative to prior month while the part-time employment partially compensated the loss increasing by 6.44 % (4,000 positions) relative to September of 2016. Comparing these results with the results across the same months last year (Table 1), one would observe a larger magnitude of change happening in September-October 2016. Furthermore, from Figure 2 one could see an earlier switch between growth and loss of employment in 2016 relative to 2015.

The interesting result during the month of October 2016 is the increase of the “not in labour force” group by 2.87 % (5,800 people), see Table 1. Again, a large number of people left the labour force and joined the “not in labour force” group. Relative to the same change last year, this year’s change is twice as large, supporting the argument that the magnitude of changes in the current regional labour market is larger than before. As mentioned in the prior labour market briefings, the “not in labour force” group includes people transitioning to retirement, students quitting their jobs and dedicating their full-time to study, as well as discouraged job seekers. It is possible that somewhat more people decided to retire during the months of September-October of 2016 than during the same months last year, as well as it is possible that more people decided to dedicate their time to studying than last year. We’ll continue to see the “discouraged” job seekers switching sides, actively seeking vs. temporarily quitting, and making a significant impact on the labour market results during the year. March-April and August-September seem to be the prime months when these transitions are more visible.

Source: Statistics Canada, CANSIM, Table 282-0122

Figure 2

The participation rate during October of 2016 dropped by 1 % relative to the prior month settling for 62.9 %, which is significantly lower than last year during October (65.5 %), see Table 1. The same trend could be observed for the employment rate that dropped to 59.2% during October of 2016, which is significantly lower than during the same month of 2015, 61.2%. All these results suggest that the current regional labour market conditions dropped somewhat during the October of 2016.

Furthermore, looking at employment by economic sector (Table 2) one would observe that the goods-producing sector shed about 3,100 positions while the service-producing sector compensated by adding about 500 positions during the month of October relative to September of 2016. “Construction” and “Manufacturing” have been the largest contributors to the loss suffered by the goods-producing sector while “Education,” “Health care and social assistance,” “Professional, scientific and technical services” and “Information, culture and recreation” subsectors have been the largest contributors to the changes in the service-producing sector (Table 2).

The local press has been reporting fewer stories about expansions, or reductions, of business activity in the region during October of 2016. Among the businesses that made the news during October of 2016 were: Bron Media Inc., Mountain Equipment Co-op (MEC), Veresen Inc. owner of District Energy Plant, the Operational Stress Injury Clinic at Parkwood Institute, Western University and Government of Canada.

Hopefully, the beauty of the Fall season will reverse the trends of the regional labour market towards the positive side.